TMI Blog2008 (2) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Bajoria has rightly contended that going by the language in the definition of "sale" in the Act as well as the amended provision of the Constitution the concept of mutuality is not obliterated. In the clauses (e) and (f) had there been specific mention of supply irrespective of payment, the provision of the said Act would have been applicable and the mutuality concept could be said to have been obliterated. Application dismissed. - W.P.T.T. No. 652 of 2006 - - - Dated:- 1-2-2008 - KALYAN JYOTI SENGUPTA AND MANIK MOHAN SARKAR , JJ. KALYAN JYOTI SENGUPTA J. By this application the State of West Bengal has impugned the judgment and order dated July 3, 2006(1) passed by the learned Taxation Tribunal, West Bengal, whereby and whereunder several matters being case Nos. RN 17 of 2003, RN 46 of 2004, RN 71, 72, 73, 120, 121 and 122 of 2003 filed by Calcutta Club Limited and Hindustan Club Limited, respectively, were disposed of as it was noted by the learned Tribunal that the legal controversies involved in these matters are identical and similar. However, the present application has been filed against Calcutta Club Limited and not against Hindustan Club Limited. In our view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n changed and/or brought into the statute book borrowing the language of the article 366 of the Constitution of India. The learned Tribunal held that even the language mentioned in article 366, clause (29A)(e) and (f) of the Constitution of India which is the source of the present definition of sale as mentioned in the said Act does not obliterate and eliminate the concept of mutuality and/or reciprocity of the members of incorporated club vis-a-vis its permanent members. In substance, the learned Tribunal held that there has been no sale which requires consideration, in the club as because there has been an identity between the members and the club which is an alter ego of the members collectively. It is further observed by the learned Tribunal that payment made by the members to the club is in real sense payment to themselves who are the principals and the club though being a separate entity, is an agent and instrument for collection of such payment. According to the learned Tribunal consideration either making payment in cash or otherwise is germane to constitute a transaction being sale. Accordingly, the learned Tribunal allowed the application and granted relief. Mr. L.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n India v. State of West Bengal reported in [2002] 40 STA 154 as being sub silentio. Mr. R.N. Bajoria, learned Senior Advocate, appearing with Mr. J.P. Khaitan and Mr. B.K. Roy on behalf of the Calcutta Club Limited submits that the judgment of the learned Tribunal is well-reasoned and considered dealing with all the laws on the subject with reference to the fact of existence of mutuality and reciprocity between the members and the club itself though an incorporated one. He further submits that it is well-settled law that mutual transactions of an incorporated club with its members which are not liable to pay tax as the club acts only as agent of the members. He further submits that sub-clause (e) of article 366(29A) is confined to unincorporated clubs. The statements of objects assumed that incorporated clubs were already taxable though that was not the case. Sub-clause (e) does not apply to the incorporated clubs. His further contention is that the Revenue has also not justified taxation with reference to sub-clause (e). He contends that the Supreme Court judgment and order in Automobile Association of Eastern India's case [2002] 40 STA 154 is not declaration of law under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idation or exemption in case of mutual transactions of incorporated clubs which were erroneously assumed to be already taxable and not required to be included as deemed sales. We have heard the learned counsel extensively and given our anxious consideration in the matter of controversy. The point for consideration in this case is whether the learned Tribunal having regard to the definition of sale in section 2(30) of the 1994 Act read with clause (29A) of article 366 sub-clauses (e) and (f) of the Constitution of India had decided correctly that the members' club like the first respondent herein comes within the purview of the aforesaid definition in view of the mutuality and reciprocity amongst the members in the club. It is now well-settled that before amendment of article 366 with insertion of sub-clauses (e) and (f) of clause (29A) of the Constitution of India the position of the law was that the members' club proprietor club was not exigible to sales tax with regard to the sale and supply of food, drinks and beverages by the club to its members whether the same is incorporated or unincorporated. Before insertion the Supreme Court in the case of Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration; . . . and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person or unincorporated association or body of persons making the transfer, delivery, or supply and, purchase of those goods by the person to whom such transfer, delivery, or supply is made, but does not include a mortgage, hypothecation, charge or pledge. . . After the aforesaid Constitutional amendment was incorporated in the State of Tamil Nadu as well as by the State of Andhra Pradesh there have been two amended definition of sale adopting in substance aforesaid constitutional provision. We find one of such cases was decided by the Andhra Pradesh High Court reported in [1992] 87 STC 227 namely Jubilee Hills International Centre v. Commercial Tax Officer. In that case relying on the definition made in the corresponding definition of sale in the State Act reading with the aforesaid constitutional provision the Division Bench held that the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny payment is made essentially for supply of drinks, beverages or not, though apparently upon presenting the bill the club collects money for the supply made. In our considered opinion if it is examined closely it will appear such collection by the club from members is not payment of price of drinks or beverages, it is rather reimbursement of expenses met from the fund of the club, which has been contributed by the members themselves (1)Here Italicised. or the members concerned earlier. The drinks and beverages are purchased from the market by the club as agent of the members, obviously upon payment of sales tax wherever exigible, and then presented before the members and in order to make good depleted fund of the club because of purchase, such payment is released. Since the transaction is huge and expenses is enormous, maintenance of record is automatic necessity for all purposes because the income and expenditure of the club have to be accounted for to the members who are the soul of the club. The members collectively is the real life, and the club is a superstructure only, therefore, mere fact of presentation of bills and non-payment thereof consequently striking off membership ..... X X X X Extracts X X X X X X X X Extracts X X X X
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